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Maine Enacts a Law Aimed at Controlling Cost of Drugs

The Maine Legislature gave final passage yesterday to a bill that makes Maine the first state to threaten the pharmaceutical industry with price controls, which could come into force in 2003, and in the meantime effectively turns the state into a giant drug-price negotiator for about half its citizens.

Gov. Angus King, an independent, signed the bill last night.

''If the industry can consolidate and increase its market power, so can we,'' Mr. King said. ''We're going to bargain on behalf of 50 percent of our citizens and we think that they deserve the same consideration as other groups that get discounts based on their volume.''

The solution to rising drug prices really belongs at the federal level, Governor King said, ''but in the meantime we've got some people up here who need help.'' He added, ''We've got people who are literally making choices between life-giving drugs and their rent.''

The bill, a compromise version, is less radical than the original measure passed by the Legislature on April 11. That bill decreed that if drug prices in Maine did not fall significantly by Oct. 1 of next year, a ''fair pricing'' commission would mandate that all prescription drugs sold in the state cost no more than they do in Canada, where drugs are generally less expensive.

But Senator Chellie M. Pingree, the Democratic majority leader and the bill's sponsor, said the compromise measure was far more legally defensible. The pharmaceutical industry is expected to challenge the law in court. Senator Pingree said the new version had the state make a much more concerted effort to bring prices down through voluntary measures before price controls.

The State Senate unanimously passed the bill yesterday before it went back to the House, where it passed overwhelmingly.

In Vermont, a similar bill has passed both houses in different forms and is under negotiation in a conference committee, with price controls one of the sticking points.

Peter Shumlin, president pro tempore of the Vermont Senate, said yesterday that Vermont lawmakers were in hourly contact with their colleagues in Maine, adding, ''This is the first victory for true fair pricing in the United States.''

The pharmaceutical industry expressed displeasure with the new Maine law. Alan F. Holmer, president of Pharmaceutical Research and Manufacturers of America, said the law ''gives a 'go-away' signal to innovators, including Maine's promising biotechnology industry, and will depress the climate for investment in the state.'' With passage of the bill, Mr. Holmer said, ''Maine has become the most antibusiness state in the United States.''

Governor King called the accusation ''utter nonsense,'' adding: ''I'm a businessman myself, and we have a very supportive atmosphere here for business.''''And I'll be surprised if many other states don't follow this lead.''

Senator Pingree said the law makes the state ''a lot like a buying pool, using its power as a purchaser.''

In a state with more than 1.2 million people, the bill will create the Maine Rx program that will negotiate prescription drug prices for the estimated 325,000 who are uninsured or have insurance that does not cover prescriptions as well, as 200,000 people in Medicaid and prescription drug programs for the elderly.

It also imposes ''profiteering'' penalties of up to $100,000 per action on manufacturers or distributors who are considered to be charging excessive prices for drugs or restricting the state's supplies. It creates a 12-member commission to review drug prices and access, and provides for an extra $3 fee to pharmacies for every prescription they fill in the Maine Rx program.

If the commission determines as of Jan. 5, 2003, that the price of drugs bought in the Maine Rx program are not reasonably comparable with the lowest drug prices paid in the state by patients with discounts like those offered veterans, then the state can begin imposing price limits requiring such discounts as of July 1, 2003.